Contents

When will I receive my quarterly tax estimates?

Quarterly taxes 101

How we calculate your quarterly tax estimates

How to receive the most accurate quarterly tax estimates

How do I calculate my taxes manually?

When will I receive my quarterly tax estimates?

If your onboarding is complete by the date listed below, you can expect to receive your estimate in the month before the IRS due date.

If your onboarding is not complete by the date listed below, please click here to learn about the manual process

If you are unsure of your onboarding status, please email [email protected]

If Your Onboarding Is Complete By

Expect Your Estimate

For IRS Due Date

Using QBO/Xero Activity Taken into Account

March 31

March 1 -

April 10

April 15

January 1 - February 28

May 31

May 1 -

June 10

June 15

January 1 - April 30

August 31

August 1 -

September 10

September 15

January 1 - July 31

December 31

December 1 -

January 10

January 15

January 1 - November 30

Quarterly taxes 101

When you’re an employee, taxes are withheld from your paycheck, and these withholdings are applied to your final tax bill. As an S Corp, taxes are withheld from your paycheck for your salary, but these taxes don’t fully account for your S Corp’s pass-through profits. That’s where your quarterly taxes come in.

Every quarter, the government requires that you pay estimated taxes on those pass-through profits. Estimated taxes are due: April 15th, June 15th, September 15th (not for CA residence), and January 15th. If those dates fall on a weekend or holiday, the deadline moves to the next business day.


How we calculate your quarterly tax estimates

As a Collective member, you don’t have to worry about the hardest part of quarterly taxes- doing the math! We take care of that for you. If you’re curious about how we crunch the numbers, here’s how we do it.

First, we pull information from your QuickBooks/Xero and Gusto accounts and review your financial activity from January 1st through last full month. Then we annualize your activity, which is a fancy way of saying that we use your year-to-date information to project your annual income by determining the average net income per month then multiplying by twelve.

By annualizing your income, we can project your marginal tax rate to help us determine your anticipated total tax liability for the year based on your S Corp activity.

Next, we divide the total tax liability by four for both Federal and State (with the exception of CA), if applicable. For example, if we think you’ll owe $16,000:

$16,000/4 = $4,000


We also take into account any prior estimated payments we advised and any income taxes that were withheld via payroll. If you made $4,000 in estimated taxes and are projected to have $2,000 withheld, we would do this:

$16,000 - $4,000 - $2,000 = $10,000

Then, we divide what’s left of your projected annual tax bill by the number of estimated tax periods left. In this example, there are two payment periods left.

$10,000 / 2 = $5,000

Because these are estimates, we round the results to the nearest $500.


How to receive the most accurate quarterly tax estimates

Because your quarterly tax estimates rely on your revenue and expenses, it’s important that your bookkeeping is up to date. If you’re a few months behind on your bookkeeping, now is a good time to catch up.

Here are some other tips for accurate quarterly tax estimates:

  • Connect QuickBooks Online/Xero and your business bank accounts

  • Don’t co-mingle personal and business transactions

  • Make sure to record all business expenses

  • If you missed any expenses, enter them manually in the books

How do I calculate my taxes manually?

If your onboarding is complete by the date listed below, you can expect to receive your estimate in the month before the IRS due date. Click here to learn about the automated process.

If your onboarding is not complete by the date listed below, please read on to learn about the manual process.

If you are unsure of your onboarding status, please email [email protected]

If Your Onboarding Is Not Complete By

Run a QBO/Xero P&L For

For IRS Due Date

March 31

January 1 - March 31

April 15

May 31

January 1 - May 31

June 15

August 31

January 1 - August 31

September 15

December 31

January 1 - December 31

January 15

Action

To manually calculate your quarterly tax estimate, please follow these steps. These steps are for a general rule of thumb and that the accuracy will improve once you are fully onboarded. If you have any questions about these steps please email [email protected]:

  1. Check the table above for IRS Due Date

  2. Either, run a report from your QBO P&L for the date range indicated in the table above. Be sure to select "cash" as the accounting method and click run report.

  3. OR run a report from your XERO Income Statement for the date range indicated in the table above.

  4. If you live in a state that has personal income tax, multiply your net income by the appropriate amounts: 30% to the federal government, and 5% to your state government.

  5. If you live in a state that does not have a personal income tax, multiply your net income by the appropriate amounts: 30% to the federal government. We're looking at you Florida, Texas, and Washington.

  6. Subtract any quarterly estimates you may have previously made. Then remit the remaining balance to each tax authority.

  7. Click here to pay the federal government.

  8. Click here to pay your state government.

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